What is the difference between a Reverse Mortgage and a Home Equity Loan?
How is a reverse mortgage different from a traditional home equity loan or a home equity line of credit?
A reverse mortgage offers certain advantages:
- With a traditional home equity line of credit, you must make monthly principal and interest payments on the balance while you live in the home- with a reverse mortgage, you don’t. Your reverse mortgage balance, including accrued interest and fees, does not have to be repaid until you sell the home or permanently leave the home, as long as you meet your loan obligations (which include keeping current with property-related taxes, insurance and upkeep).
- With a reverse mortgage line of credit, the unused amount in your credit line actually grows over time- giving you access to more available funds. This means that the less you take out up front, the more will be available to you later.
- And the lender cannot “freeze” or reduce the line of credit, as long as you fulfill your loan obligations- so it will be there if and when you need it.
Mary Loeven
Reverse Mortgage Specialist – HECM for Purchase Specialist
NMLS #506596
Cell- (302) 246-5015
reversefunding.com/mary-loeven
This website has not been reviewed, approved, or issued by HUD, FHA, or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.
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